The Mexico Equity and Income Fund, Inc.
|
|||||||||
Schedule of Investments
|
|||||||||
April 30, 2017 (Unaudited)
|
|||||||||
MEXICO - 102.75%
|
Shares
|
Value
|
|||||||
COMMON STOCKS - 97.61%
|
|||||||||
Airports - 7.09%
|
|||||||||
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. - Series B
|
769,649
|
$
|
4,271,137
|
||||||
Grupo Aeroportuario del Pacifico, S.A.B. de C.V. - Series B
|
217,044
|
2,232,094
|
|||||||
6,503,231
|
|||||||||
Auto Parts and Equipment - 4.40%
|
|||||||||
Nemak, S.A.B. de C.V.
|
1,316,000
|
1,391,132
|
|||||||
Rassini, S.A.B. de C.V.
|
560,523
|
2,644,025
|
|||||||
4,035,157
|
|||||||||
Banking Service Groups - 1.25%
|
|||||||||
Gentera, S.A.B. de C.V.
|
682,928
|
1,144,910
|
|||||||
Beverages - 5.75%
|
|||||||||
Arca Continental, S.A.B. de C.V.
|
441,312
|
3,255,468
|
|||||||
Fomento Economico Mexicano, S.A.B. de C.V. - Series UBD
|
224,438
|
2,019,736
|
|||||||
5,275,204
|
|||||||||
Building Materials - 7.18%
|
|||||||||
Cemex, S.A.B. de C.V. - Series CPO (a)
|
6,093,429
|
5,606,204
|
|||||||
Grupo Cementos de Chihuahua, S.A.B. de C.V.
|
206,793
|
980,839
|
|||||||
6,587,043
|
|||||||||
Chemical Products - 4.91%
|
|||||||||
Alpek, S.A.B. de C.V. - Series A
|
2,183,529
|
2,617,880
|
|||||||
Mexichem, S.A.B. de C.V.
|
690,322
|
1,890,338
|
|||||||
4,508,218
|
|||||||||
Construction and Infrastructure - 5.17%
|
|||||||||
Promotora y Operadora de Infraestructura, S.A.B. de C.V.
|
244,857
|
2,612,553
|
|||||||
Promotora y Operadora de Infraestructura, S.A.B. de C.V. - Series L
|
256,181
|
2,132,296
|
|||||||
4,744,849
|
|||||||||
Energy - 3.56%
|
|||||||||
Infraestructura Energetica Nova, S.A.B. de C.V.
|
699,458
|
3,267,438
|
|||||||
Financial Groups - 14.25%
|
|||||||||
Banregio Grupo Financiero, S.A.B. de C.V. - Series O
|
522,201
|
3,011,111
|
|||||||
Grupo Financiero Banorte, S.A.B. de C.V. - Series O
|
1,105,467
|
6,397,824
|
|||||||
Grupo Financiero Inbursa, S.A.B. de C.V. - Series O
|
925,000
|
1,562,038
|
|||||||
Grupo Financiero Interacciones, S.A.B de C.V. - Series O
|
452,549
|
2,108,742
|
|||||||
13,079,715
|
|||||||||
Food - 1.86%
|
|||||||||
Gruma, S.A.B. de C.V. - Series B
|
127,755
|
1,705,956
|
|||||||
Holding Companies - 3.27%
|
|||||||||
Alfa, S.A.B. de C.V. - Series A
|
2,180,861
|
2,996,979
|
|||||||
Hotels, Restaurants, and Recreation - 4.38%
|
|||||||||
Alsea, S.A.B. de C.V. - Series A
|
714,747
|
2,539,644
|
|||||||
Grupe, S.A.B. de C.V. - Series B (a)(b)
|
599,082
|
1,479,466
|
|||||||
4,019,110
|
Mining - 9.91%
|
||||||||
Grupo Mexico, S.A.B. de C.V. - Series B
|
2,400,251
|
7,059,768
|
||||||
Industrias Penoles, S.A.B. de C.V.
|
83,756
|
2,038,369
|
||||||
9,098,137
|
||||||||
Real Estate Services - 2.99%
|
||||||||
Corporacion Inmobiliaria Vesta, S.A.B. de C.V.
|
1,950,458
|
2,748,736
|
||||||
Retail - 9.07%
|
||||||||
El Puerto de Liverpool, S.A.B. de C.V. - Series C - 1
|
99,916
|
770,816
|
||||||
Grupo Sanborns, S.A.B. de C.V. - Series B - 1
|
2,127,617
|
2,441,217
|
||||||
Organizacion Soriana, S.A.B. de C.V. - Class B (a)
|
406,600
|
932,198
|
||||||
Wal-Mart de Mexico, S.A.B. de C.V.
|
1,852,610
|
4,182,464
|
||||||
8,326,695
|
||||||||
Telecommunication - 12.57%
|
||||||||
America Movil, S.A.B. de C.V. - Series L
|
11,625,352
|
8,935,809
|
||||||
Telesites S.A.B. de C.V. (a)
|
4,153,376
|
2,603,410
|
||||||
11,539,219
|
||||||||
TOTAL COMMON STOCKS (Cost $81,307,053)
|
89,580,597
|
CAPITAL DEVELOPMENT CERTIFICATES - 2.29%
|
|||||||||
Atlas Discovery Trust II (b)(c)
|
300,000
|
2,096,516
|
|||||||
TOTAL CAPITAL CERTIFICATES (Cost $1,460,702)
|
2,096,516
|
||||||||
SHORT-TERM INVESTMENTS - 2.85%
|
Principal
|
||||||||
Mexican BANOBRA
|
|||||||||
0.000% Coupon, 6.431% Effective Yield, 5/02/2017 (d)
|
22,700,000
|
*
|
1,205,622
|
||||||
Mexican INAFIN
|
|||||||||
0.000% Coupon, 6.487% Effective Yield, 5/03/2017 (d)
|
26,500,000
|
*
|
1,407,441
|
||||||
TOTAL SHORT-TERM INVESTMENTS (Cost $2,594,184)
|
2,613,063
|
||||||||
TOTAL MEXICO (Cost $85,361,939)
|
94,290,176
|
||||||||
UNITED STATES - 0.12%
|
Shares
|
||||||||
INVESTMENT COMPANIES - 0.12%
|
|||||||||
Morgan Stanley Institutional Liquidity Funds - Government Portfolio - Institutional Class - 0.646% (e)
|
114,515
|
114,515
|
|||||||
TOTAL INVESTMENT COMPANIES (Cost $114,515)
|
114,515
|
||||||||
TOTAL UNITED STATES (Cost $114,515)
|
|||||||||
Total Investments (Cost $85,476,454) - 102.87%
|
94,404,691
|
||||||||
Liabilities in Excess of Other Assets - (2.87)%
|
(2,622,486
|
)
|
|||||||
TOTAL NET ASSETS - 100.00%
|
$
|
91,782,205
|
|||||||
Percentages are stated as a percent of net assets.
|
(a)
|
Non-income producing security.
|
||||||||
(b)
|
Fair valued security. The total market value of this security was $3,575,982, representing 3.90% of net assets.
|
||||||||
(c)
|
Illiquid security. The total market value of this security was $2,096,516, representing 2.29% of net assets.
|
||||||||
(d)
|
Effective yield based on the purchase price. The calculation assumes the security is held to maturity.
|
||||||||
(e)
|
The rate shown represents the 7-day yield at April 30, 2017.
|
||||||||
*
|
Principal amount in Mexican pesos.
|
The cost basis of investments for federal income tax purposes at April 30, 2017 was as follows:
|
||||
Cost of investments**
|
$
|
85,476,454
|
||
Gross unrealized appreciation
|
9,827,068
|
|||
Gross unrealized depreciation
|
(898,831
|
)
|
||
Net unrealized appreciation
|
$
|
8,928,237
|
**Because tax adjustments are calculated annually at the end of the Fund's fiscal year, the above table does not reflect tax adjustments for the current fiscal year. For the previous fiscal year's federal income tax information, please refer to the Notes to Financial Statements section of the Fund's most recent annual report.
|
||||||||||
Significant accounting policies are as follows:
|
||||||||||
Portfolio Valuation: Investments are stated at value. Listed equity securities are valued at the closing price on the exchange or market on which the security is primarily traded (the “Primary Market”) at the valuation time. If the security did not trade on the Primary Market, it shall be valued at the closing price on another comparable exchange where it trades at the valuation time. If there are no such closing prices, the security shall be valued at the mean between the most recent highest bid and lowest ask prices at the valuation time. Investments in short-term debt securities having a maturity of 60 days or less are valued at amortized cost if their term to maturity from the date of
purchase was less than 60 days, or by amortizing their value on the 61st day prior to maturity if their term to maturity from the date of purchase when acquired by the Fund was more than 60 days. Other assets and securities for which no quotations are readily available will be valued in good faith at fair value using methods determined by the Board of Directors. These methods include, but are not limited to, the fundamental analytical data relating to the investment; the nature and duration of restrictions in the market in which they are traded (including the time needed to dispose of the security, methods of soliciting offers and mechanics of transfer); the evaluation of the forces which influence the market in which these securities may be purchased or sold, including the economic outlook and the condition of the industry in which the issuer participates. The Fund has a Valuation Committee comprised of independent directors which oversees the valuation of portfolio securities.
|
The Valuation Committee of the Fund shall meet to consider any fair valuations. This consideration includes reviewing various factors set forth in the pricing procedures adopted by the Board of Directors and other factors as warranted. In considering a fair value determination, factors that may be considered, among others include; the type and structure of the security; unusual events or circumstances relating to the security's issuer; general market conditions; prior day's valuation; fundamental analytical data; size of the holding; cost of the security on the date of purchase; trading activity and prices of similar securities or financial instruments.
|
||||||||||
FAIR VALUE MEASUREMENTS
|
||||||||||
The Fund follows the FASB ASC Topic 820 hierarchy, under which various inputs are used in determining the value of the Fund’s investments. The basis of the hierarchy is dependent upon various “inputs” used to determine the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below:
|
||||||||||
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
|
||||||||||
Level 2 – Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either
|
||||||||||
directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for
|
||||||||||
similar instruments, interest rates, prepayment speeds, credit risks, yield curves, default rates and similar data.
|
||||||||||
Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing
|
||||||||||
the company's own assumptions about the assumptions a market participant would use in valuing the asset or
|
||||||||||
liability , and would be based on the best information available.
|
||||||||||
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of the markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
|
||||||||||
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant on the lowest level input that is significant to the fair value measurement in its entirety.
|
||||||||||
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
|
The following is a summary of the inputs used to value the Fund's investments carried at fair value as of April 30, 2017:
|
||||||||||||||||
Level 1*
|
Level 2*
|
Level 3**
|
Total
|
|||||||||||||
Equity
|
||||||||||||||||
Airports
|
$
|
6,503,231
|
$
|
-
|
$
|
-
|
$
|
6,503,231
|
||||||||
Auto Parts and Equipment
|
4,035,157
|
-
|
-
|
4,035,157
|
||||||||||||
Banking Service Groups
|
1,144,910
|
1,144,910
|
||||||||||||||
Beverages
|
5,275,204
|
-
|
-
|
5,275,204
|
||||||||||||
Building Materials
|
6,587,043
|
-
|
-
|
6,587,043
|
||||||||||||
Capital Development Certificates
|
-
|
-
|
2,096,516
|
2,096,516
|
||||||||||||
Chemical Products
|
4,508,218
|
-
|
-
|
4,508,218
|
||||||||||||
Construction and Infrastructure
|
4,744,849
|
-
|
-
|
4,744,849
|
||||||||||||
Energy
|
3,267,438
|
3,267,438
|
||||||||||||||
Financial Groups
|
13,079,715
|
-
|
-
|
13,079,715
|
||||||||||||
Food
|
1,705,956
|
-
|
-
|
1,705,956
|
||||||||||||
Holding Companies
|
2,996,979
|
-
|
-
|
2,996,979
|
||||||||||||
Hotels, Restaurants, and Recreation
|
2,539,644
|
-
|
1,479,466
|
4,019,110
|
||||||||||||
Mining
|
9,098,137
|
-
|
-
|
9,098,137
|
||||||||||||
Real Estate Services
|
2,748,736
|
-
|
-
|
2,748,736
|
||||||||||||
Retail
|
8,326,695
|
-
|
8,326,695
|
|||||||||||||
Telecommunications
|
11,539,219
|
-
|
-
|
11,539,219
|
||||||||||||
Total Equity
|
$
|
88,101,131
|
$
|
-
|
$
|
3,575,982
|
$
|
91,677,113
|
||||||||
Short-Term Investments
|
$
|
114,515
|
$
|
2,613,063
|
$
|
-
|
$
|
2,727,578
|
||||||||
Total Investments in Securities
|
$
|
88,215,646
|
$
|
2,613,063
|
$
|
3,575,982
|
$
|
94,404,691
|
* Transfers between Levels are recognized at the end of the reporting period.
|
||||||||||
** The Fund measures Level 3 activity as of the beginning and end of each reporting period.
|
||||||||||
Transfers between Level 2 and Level 3 securities as of April 30, 2017 resulted from securities priced previously at the mean between the most recent bid and asked prices (Level 2 securities) to a price provided by the Adviser (Level 3 securities). Transfers as of April 30, 2017 are summarized in the table below:
|
Transfers into Level 2
|
$
|
-
|
||
Transfers out of Level 2
|
(1,479,466
|
)
|
||
Net transfers in and/or out of Level 2
|
$
|
(1,479,466
|
)
|
|
Transfers into Level 3
|
$
|
1,479,466
|
||
Transfers out of Level 3
|
-
|
|||
Net transfers in and/or out of Level 3
|
$
|
1,479,466
|
Disclosures about Derivative Instruments and Hedging Activities
|
||||||||||||||||||||||||||||
The Fund did not invest in derivative securities or engage in hedging activities during the period ended April 30, 2017.
|
||||||||||||||||||||||||||||
Level 3 Reconciliation Disclosure
|
||||||||||||||||||||||||||||
Following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.
|
||||||||||||||||||||||||||||
Category
|
Balance
as of 7/31/2016 |
Acquisitions
|
Dispositions
|
Return of Capital
|
Realized Gain (Loss)
|
Change
in unrealized appreciation (depreciation) |
Balance
as of 4/30/2017 |
|||||||||||||||||||||
Common Stock
|
$
|
2,188,852
|
$
|
-
|
$
|
(765,432
|
)
|
$
|
186,269
|
$
|
(130,223
|
)
|
$
|
1,479,466
|
||||||||||||||
Capital
Development
Certificates
|
2,494,332
|
-
|
-
|
(311,734
|
)
|
(147,026
|
)
|
60,944
|
2,096,516
|
|||||||||||||||||||
|
$
|
4,683,184
|
$
|
-
|
$
|
(765,432
|
)
|
$
|
(311,734
|
)
|
$
|
39,243
|
$
|
(69,279
|
)
|
$
|
3,575,982
|
The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and
categorized within Level 3 as of April 30, 2017:
|
|||||||||
Fair Value April 30, 2017
|
Valuation
Methodologies
|
Unobservable
Input (1)
|
Impact to Valuation
from an Increase in
Input (2)
|
||||||
Common Stock
|
$
|
1,479,466
|
Market
Comparables/
Sum of the
Parts Valuation
|
Liquidity
Discount
|
Decrease
|
||||
Capital
Development
Certificates
|
$
|
2,096,516
|
Market
Comparables/
Sum of the
Parts Valuation
|
Liquidity
Discount
|
Decrease
|
1
|
In determining certain of these inputs, management evaluates a variety of factors including economic conditions, foreign exchange rates, industry and market developments, market valuations of comparable companies and company specific developments.
|
|||||||||
2
|
This column represents the directional change in the fair value of the Level 3 investment that would result from increases to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect.
|
(a)
|
The Registrant’s President and Chief Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) (17 CFR 270.30a-3(c)) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or Rule 15d‑15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(d)).
|
(b)
|
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) (17 CFR 270.30a-3(d)) that occurred during the Registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting.
|
1.
|
I have reviewed this report on Form N-Q of The Mexico Equity & Income Fund, Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation;
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: 6/13/2017
|
/s/ Maria Eugenia Pichardo
|
Maria Eugenia Pichardo
President
|
1.
|
I have reviewed this report on Form N-Q of The Mexico Equity & Income Fund, Inc;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940)for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation;
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: 6/13/2017
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/s/ Arnulfo Rodriguez
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Arnulfo Rodríguez
Chief Financial Officer
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